Report: Max Baucus wants to preserve estate-tax cut

Senate Finance Committee Chair Max Baucus wants to protect an estate tax reduction from any deal averting the fiscal cliff, according to his hometown newspaper.

Baucus told the Great Falls Tribune in an interview Sunday that he wants to keep the Bush-era rate for estate taxes in order to protect ranchers and farmers who pass their properties on to their children.

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“…Baucus is working to preserve a reduction in estate taxes that exempts the first $5 million of an estate’s value for individuals and taxes the remainder at 35 percent,” the paper wrote, but didn’t include direct quotes from Baucus on the topic.

“Couples can combine their exemptions to total $10 million. They also can give away an estate and face similarly lower gift taxes. Those tax cuts, which help farmers and ranchers pass their agriculture assets on to their children, expire at the end of 2012. Without action by Congress, only the first $1 million of an estate will be exempt from taxes, and everything over that will be taxed at 55 percent.”

The Senator also told the paper he wanted to maintain a wind production tax credit, which has helped create almost 2,000 jobs in his state.

Readers' Comments (16)

This is a bogus argument that has long been discredited. It is not a threat to the ranchers and farmers. And we are not a country that supports the perpetuation of an aristocratic class of wealthy individuals through unlimited rights of heredity.

I'm shocked, shocked that Baucus doesn't want to bring back the estate tax. After all his constituents did not build their farms. The government built those farm with crop subsidies. So when they die these farms should have to be sold to the big corporate farm companies who pay to elect folks like Baucus...

The average effective tax rate on inheritance is less than 3 percent, a fraction of the average rate on other kinds of income. And millionaires already have a lot of loopholes to avoid paying estate taxes: About 56 percent of the largest estates are bequeathed in the form of unrealized capital gains, and under current law, no one pays taxes on that income - ever.

To campaign for giving millionaires' kids a special break, you would have to argue that the increasingly unequal distribution of wealth in this country is a good thing. But roughly half of the wealthiest Americans inherited all or much of their wealth, and the United States ranks near the bottom of rich countries in terms of intergenerational mobility. Is that a good thing? Ask yourself where Donald Trump would be today if he hadn't started out with an inherited $400 million from his daddy.

Aristocratic power and wealth is maintained through unimpeded inheritence rights. After several generations, work, effort, innovation and connections to the community at large are no longer necessary. The Aristocrat may then use their power and wealth to live totally isolated and apart from non-aristocrats.

It goes beyond the one person in the 1%. The problem is those of us who work for people that own that private business or that farm. It's my job that is at risk. Not the family. So why not just tax capital gains on the sale of estate assets? That way the business is not sold unless it has to be. In the mean time, if a family member takes it over, they become CEO and get a salary, and all of us who work for him or her get to keep our job and healthcare and the company keeps going?

The big problem with the huge tax is that it will wipe out your life insurance. Life insurance is something we have paid dearly for as we have several small children and if I were to lose half of it to taxes it would be devastating. If you put it in an insurance trust that will shield it somewhat but then you have to pay taxes on the cash value when you place in a trust and maintain the trust. Seems unfair as life insurance is not the same thing as the "Paris Hilton" benefactor that most people begrudge.

If you combine life insurance, 401k, and a reasonable piece of real estate you get over $1M very quickly. I'm getting really sick of the idea that my children shouldn't be entitled to fruits of my labor because a bunch of socialists want to confiscate it and hand it over to the government to waste and redistribute.

.. and this argument is a perfect example of how twisted things are getting right now. Let's raise tax rates on anyone that works for a living but makes more than $250k, lets not fix AMT, lets deny them SS or Medicare, and then lets tax their estates when they go to their children. Hurray! more for us! While the ultra-rich liberal hypocrites like Warren Buffett will continue to pay 15% cap gains and shelter or trust their money and avoid paying any of that. You don't think that there is a consequence to this but you are wrong. People will change their behavior, you can bet on it.

If you combine life insurance, 401k, and a reasonable piece of real estate you get over $1M very quickly. I'm getting really sick of the idea that my children shouldn't be entitled to fruits of my labor because a bunch of socialists want to confiscate it and hand it over to the government to waste and redistribute.

How else do you propose to eliminate the Aristocracy problem?

The Walton Family alone is worth more money than the bottom 30% of ALL Americans. Without the estate tax, what do you think that percentage will be in 50 years?

50%?

100 years?

70%?

Scary isn't it?

Oh well. You're a Conservative. I'm sure you've instilled in your children the values which made YOU successful. Hard work, determination, tenacity. In America a person's success is simply and soley based on their personal abilities right? Therefore it shouldn't matter whether or not your children get a boatload of money handed to them for winning the genetic lottery. As long as YOU raised them then they can't possibly NOT be a success in life. There's really no logical reason why you should care what happens to your money after you die. Your kids will be just as successful as you are because they will follow Conservative principles, make good decisions and work hard.

Baucus is just another of the whores in DC that will say and do anything for his sponsors. In Montana, he is now exposed for taking huge amounts from health insurance lobbyists, Big Pharma, and the hospital lobbies. The guy is for sale. Now, the big stockmen that own much of the Montana legislature (now a red state majority) love this guy and show it with bucks. The honorable thing, which Baucus would never think of, is to keep the estate inheritance tax for all but the small single family operations with less than a section of land. And, as a bonus, eliminate the subsidies to all but small family farms and ranches. Agri business has had it too good.